What does inflation mean?


Inflation (English: inflation, referred to as inflation) refers to the phenomenon that the circulation of national paper money exceeds the amount of money needed in circulation, causing the devaluation of paper money and the rise of prices.In economics, inflation means a sustained increase in the overall price level.General inflation is a devaluation of currency or a decline in purchasing power, while devaluation is a relative reduction in the value of currencies between two economies.The former is used to describe a national currency value, while the latter is used to describe added value in the international market.The relevance of the two is one of the most contentious issues in economics.In several cases, the term inflation means an increase in the money supply, which sometimes leads to an increase in prices.The essential difference between inflation and general price rise is that the general price rise refers to a temporary, partial and reversible increase in the prices of certain commodities due to the imbalance between supply and demand, which will not cause currency devaluation.Inflation is a general, sustained and irreversible rise in the prices of major domestic commodities that can cause the devaluation of a country’s currency.Inflation refers to the phenomenon of sustained and widespread price rise in a period of time caused by the devaluation of money due to the fact that the actual demand for money is less than the money supply, that is, the real purchasing power is greater than the output supply.Its essence is social aggregate supply is less than social aggregate demand (supply is far less than demand).The standard general or general price level is the weighted average of the total prices of all goods and services traded.This weighted average is the price index.There are three price indexes to measure the inflation rate: consumer price index, producer price index and gross national product price conversion index.Simply put, when the government prints too much money, prices rise.

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